CIP - C120 Underwriting Essentials Questions with Complete Answers 2024/2025.Definition #1 - Correct Answers An underwriter is an insurance professional employed to accept or reject risk on behalf of an insurer Definition #2 - Correct Answers An underwriter is an investor of shareholder capital Definition #3 - Correct Answers An underwriter is an insurance professional employed to implement an insurer's strategic plan Complete Definition - Correct Answers An underwriter is an insurance professional who invests the capital of an insurer's shareholders by accepting or rejecting risk to implement an insurer's strategic plan Speculative Risk - Correct Answers exists where there is a chance of either gain or loss Pure Risk - Correct Answers exists where there is only a chance of loss Contract - Correct Answers an agreement between legally capable parties for a consideration demonstrating intent to do something which is legal Consideration - Correct Answers is money or a thing or act of value that one party gives or promises in exchange for the act or promise of the other party; it is the evidence that the parties intend to be bound by the contract Insurable Interest - Correct Answers exists when the insurance buyer stands in such a legal relationship to the object of insurance as to be financially benefited by its continued existence or financially prejudiced by its loss or damage.Indemnify - Correct Answers to return someone after a loss to the same financial position he or she enjoyed immediately before the loss Insurance Policy - Correct Answers a document that provides evidence of a contract of insurance. It states in detail the terms of the contract - that is, the terms of the agreement between insurer and the insured. 1 / 2
Frequency of loss - Correct Answers the ratio of the number of losses to the number of exposure units Severity of loss - Correct Answers the average size of losses Additional Insured - Correct Answers any party not automatically included as an insured but entitled to a certain degree of protection under the policy Additional NAMED insured - Correct Answers any party, other than the original named insured, identified as an insured in the policy declarations. They have more rights & responsibilities than an additional insured.Mortgage - Correct Answers when the security is real property Chattel Morgtage - Correct Answers when the security is personal property Back dated policy - Correct Answers a policy that will become effective retroactively after the applicant applies for it Expert Systems - Correct Answers are computer software programs that guide underwriters through a risk analysis, prompting them with questions and directing them according to the answers generated by the facts of the risk.Hazard - Correct Answers a condition that may cause a peril to occur Common Hazards - Correct Answers are hazards that are generally found in most occupancies Special Hazards - Correct Answers are hazards that uniquely characterize certain occupancies Flash point - Correct Answers the flash point of a liquid is the minimum temperature at which the liquid gives off sufficient vapours to form an ignitable mixture with air near the surface of the liquid or within the test vessel used
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